Part I: The Financial System

1. Money and Financial System

1.1. What is Money?
1.2. Liquidity of an Asset
1.3. The Value of Money
1.4. Price Indices
1.5. How to Use Price Indices
1.6. Inflation
1.7. The Importance of Money

2. The Financial Sector Overview

2.1. Surplus and Deficit Spending Units
2.2. Transferring Funds from SSUs to DSUs
2.3. The Benefits of Financial Intermediation
2.4. Types of Financial Intermediaries
2.5. Financial Markets
2.6. Money Market Instruments
2.7. Capital Market Instruments

3. Bond Prices and the Level of Interest Rates

3.1. What are Interest Rates?
3.2. The Mechanics of Bond Pricing
3.3. Bond Theorems
3.4. The Real Rate of Interest
3.5. Loanable Funds Theory of Interest
3.6. Price Expectations and Interest Rates
3.7. Interest Rates over the Business Cycle

4. The Structure of Interest Rates

4.1. The Term Structure of Interest Rates
4.2. Default Risk
4.3. Tax Treatment
4.4. Marketability
4.5. The Call Privilege
4.6. Comovement of Interest Rates

Part II: Central Banking

5. The Bangko Sental ng Pilipinas
5.1. Brief History
5.2. The BSP’s Balance Sheet
5.3. Major Powers of BSP: Monetary Policy
5.4. Other Powers
5.5. BSP Control of the Money Supply

6. Deposit Expansion and Money Supply

6.1. Reserve and Deposit Transfers
6.2. BSP’s Control of Deposit Expansion
6.3. Factors Affecting Deposit Expansion
 6.4. Public Preferences and Deposit Expansion
6.5. Money, Velocity, and the Economy

Part III: Commercial Banking

7. Commercial Banking
7.1. Banks as Business Firms
7.2. Balance Sheet of a Commercial Bank
7.3. The Source of Bank Funds
7.4. Bank Investments and Cash Assets
7.5. Bank Loans
7.6. Other Services Offered
7.7. Bank Funds Management
7.8. Required Reserves for a Commercial Bank
7.9. Reserve Requirement and Liquidity
7.10. Bank Regulations and Bank Regulatory Agencies

Part IV: Non-Bank Financial Institutions

8. Thrift Institutions
8.1. Assets, Liabilities and Net Worth
8.2. The Regulatory Environment
8.3. Nature

9. Credit Unions
9.1. Credit Union’s Assets, Liabilities and Net Worth
9.2. Credit Union Cooperative Arrangements
9.3. Regulation of Credit Unions

10. Finance Companies

10.1. Nature
10.2. Assets, Liabilities, and Net Worth of Finance Companies
10.3. Income and Expenses of Finance Companies
10.4. Regulation

11. Insurance Companies

11.1. The Insurance Industry
11.2. Life insurance Companies
11.3. Property Casualty Insurance Companies
11.4. Regulation of Insurance Companies
11.5. Pension Funds
11.6. Types of Pension Funds
11.7. Pension Fund Regulations

12. Investment Funds and Financial Conglomerates

12.1. Investment Funds
12.2. Money Market Mutual Funds
12.3. Real Estate Investment Trusts
12.4. Financial Conglomerates
12.5. Security Brokers and Dealers
 12.6. Retailers
12.7. Other Financial Conglomerates
12.8. Regulations of Non-depository Institutions

Part V: Financial Markets

13. Money Markets
13.1. Nature
13.2. Participants
13.3. Treasury Bills
13.4. BSP Securities
13.5. Negotiable Certificates of Deposits
13.6. Commercial Papers
13.7. Banker’s Acceptances
13.8. Repurchase Agreements in Money Markets
13.9. The Interrelationships of Money Market Interest Rates

14. Capital Markets

14.1. Purpose and Functions
14.2. Investment Banking
14.3. Corporate Bonds
14.4. Government Bonds
14.5. Corporate Stocks

15. Mortgage Markets

15.1. Nature of Mortgage Markets
15.2. Nature of Mortgage Instruments
15.3. Participants in Mortgage Markets
15.4. Government’s Role in Mortgage Markets
15.5. Relationship to Capital Markets

16. Futures Markets

16.1. The Purpose of Futures and Forward Markets
16.2. Forward Exchange Markets
16.3. Futures Markets
16.4. Regulations of Future Markets
16.5. Uses of the Financial Futures Markets
16.6. Risks in the Futures Markets
16.7. Options Markets

Part VI: Monetary Policy

17. Monetary Policy and the Financial System
17.1. Keynesian Theory and Policy
17.2. Price Levels and National Income
17.3. Employment and National Income
17.4. Quantity Theory of Money and Output
17.5. Rational Expectations Theory
17.6. Supply-Side Theory
18. Impacts of Monetary Policy on Financial Markets and Spending
18.1. Initial Impacts of BSP Policy
18.2. Effects of BSP Reserve Policy on the Financial System
18.3. Effects of Monetary Policy on Spending
18.4. Longer-Run Effects of Monetary Policy
18.5. Practical Considerations on Monetary Policy

19. Financial Institutions’ Response to Monetary Policy Changes

19.1. Effects of Monetary Policy on Interest Rates
19.2. Effects of Interest Rate Changes on Financial Insitutions
19.3. Effects of Interest Rate Changes on Commercial Banks
19.4. Effects of Interest Rate Changes on Thrift Institutions
19.5. Effects of Interest Rate Changes on Other Financial Institutions
19.6. Effects of Reserve Requirements on Financial Institutions’ Management